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Undergraduate numbers & postgraduate loans

March 18, 2015

Although the Budget has announced a new consultation of postgraduate funding, perhaps more significant is the large downwards revision to future undergraduate numbers contained in the Office for Budgetary Responsibility’s Economic & Fiscal Outlook.

Student numbers in England were expected to rise this year following the removal of the higher education numbers cap, but have done so by considerably less than expected. The latest data on student numbers and applications indicate a more gradual rise than in the original estimate of the cost of this policy change. We originally assumed that student numbers would rise relatively quickly as excess demand was catered for, but there have only been around 10,000 new entrants this year and applications for next year suggest a similar rise in 2015-16. We therefore assume that student numbers will rise by a further 10,000 in 2016-17, to 375,000, but remain broadly stable thereafter. This would still represent a steadily rising proportion of 18-19 year olds. (The ONS population projections that underpin our forecasts show around a 10 per cent decline in the number of 18 year olds in the population between 2015 and 2020.) The forecast also takes account of new postgraduate loans, the introduction of which was announced in Autumn Statement 2014. (paragraph 4.158)

The 2013 Autumn Statement thought that removing student numbers controls this coming September would reach unmet demand of 60 000 places. The OBR has revised down the projections for new student loan outlay to £16.5bn in 2019/20. In December it thought that £18bn would be going out the door each year, indicating that it thinks there will be  100 -150 000 fewer undergraduate students to fund each year. (New Postgraduate loan uptake is included in that £16.5bn).

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One Comment
  1. Julian Gravatt permalink

    It’s possible that OBR are being pessimistic about the aspirations of young people. The big longitudinal study on young people funded by DFE shows a marked increase in the percentage of 13 year olds who plan to apply to university compared to the cohort surveyed nine years before. 79% thought themselves very or fairly likely to apply compared to 69% in the earlier cohort. Page 104 here https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/374649/RR388_-_Longitudinal_study_of_young_people_in_England_cohort_2__wave_1.pdf

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